April 25, 2005 –– After more than 18 months in political limbo, the Government Employees Retirement System reform legislation saw light of day Monday when the 63-page document was delivered to Sen. Louis Hill's office shortly before 5 p.m.
The Retirement System Reform Act of 2005, sponsored by Hill and Sen. Norman Jn Baptiste, is the first piece of legislation to be directed to the retirement system in its 46 years of existence.
It is no secret that the system is in trouble. The GERS officers told the Senate Finance Committee last July that the system is guaranteed to collapse within 10 years if economic reform measures are not instituted.
The board has been raising concerns for several years about having to use investment earnings to fund retiree payouts. The government contributes about $50 million a year to the system and employee contributions amount to $23 million, for a total of some $73 million.
The reform bill first came to light at an October 2003 meeting of the Advocates for the Preservation of the Retirement System. Hill spoke at that meeting, along with Raymond T. James, GERS board chair, who presented the legislation. Since that time, Hill has been working closely with the GERS board.
Hill said at that time that his office had been working with GERS administrators and board members for six months on the bill. "I take no credit for the legislation," he told the GERS representatives. "You're the pros."
Hill said at a July 2004 Senate Finance Committee meeting that the bill was being reviewed by the legislative legal counsel and should reach the Senate floor "soon."
That "soon" occurred Monday when the legal counsel's office delivered what is called the "blue copy," the official document, to Hill's office. Though it wasn't possible to contact Hill Monday evening, Colette Monroe, Hill's chief researcher was ecstatic. "It's here!" she said.
Hill submitted the bill at the outset of the 26th Legislature, and has been awaiting the blue copy ever since. It had to go through a series of minor changes with the legal counsel. "Most of them were technical things," Monroe said. "The bill is essentially the same bill."
The reform proposal calls for both government and employee contribution levels to increase, with one schedule of increases for current workers and another for future hires beginning in fiscal year 2005. GERS officers have said the proposed changes would allow GERS to reduce, or at least slow down, the future deficit growth of its burgeoning unfunded liability.
Hill had said several weeks ago that upon receipt of the legislation, he would forward it to the Senate president's office for a committee assignment. He also said he was considering a series of town meetings to educate the public.
Senate President Lorraine Berry, in an April 12 response to a letter from the Advocates for the Preservation of the Government Employees Retirement System urging her to assign the legislation, said that she would assign the bill to the Committee of the Whole when she received it.
The news was received with equal enthusiasm Monday by Mary Davis, APRS group chair. She said, "It's wonderful."
Davis replaced Vernelle De LaGarde last month as APRS chair. De LaGarde, local American Federation of Teachers president, said Monday she had stepped down because it presented a conflict of interest with her AFT post. However, she still would continue to speak in behalf of the GERS legislation.
Davis said, "We are very happy that the bill has moved out. This is something we were working for, and we are very hopeful. We will monitor its progress." The APRS is a volunteer group dedicated to bringing awareness to government employees about their stake in the future of the retirement system.
"We have been educating the public on the content of the bill," Davis said. "We are very pleased because the GERS has a tremendous affect on the V. I. economy, and the people of the Virgin Islands. We want to educate our people, and have the younger people coming up in the system plan for their retirement." She added, "It's a different world, things have changed and people have to be concerned."
The territory's retirement system's problems are not unique. Many jurisdictions in the states are experiencing similar dilemmas. Closer to home, Puerto Rico's system is facing problems with a shorter deadline than that projected for the Virgin Islands.
According to a March 9 story in the San Juan Star by Xavira NeggersCrescioni, William Lockwood Benet, government development bank president said, "The commonwealth's retirement system will be insolvent within the next five to seven years if nothing is done to increase its funding."
The pension system's gap between its assets and pending responsibilities to retirees could be as high as $11 billion, according to the Government Transition Committee. Among steps Gov. Acevdo Vila is considering, the story says, is hiking water rates, or placing a tax on consumption.
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